A Snapshot of the Thai Legal Market
Thailand’s legal market is currently experiencing a period of growth. Recent years have seen an increasing number of businesses looking to expand or establish a presence in the country, resulting in a strong demand for legal services in areas such as foreign investment, mergers & acquisitions, and intellectual property rights enforcement. Several key industries have been driving this demand, including tourism, real estate, technology, and e-commerce. These sectors require legal frameworks to navigate their respective challenges, and law firms are stepping up to provide guidance on both local laws and international regulations.
What makes Thailand’s legal market distinctive from other countries within the region are its unique socio-economic landscape, and the relative maturity of its legal and economic systems. Many neighboring countries are still in the midst of developing their legal frameworks and the required infrastructure. This is not to suggest that Thailand’s industry is immune to the general instability that fluctuating markets can cause – the Coronavirus pandemic has shown us just that . This means that the ability to adapt, to respond quickly and come up with innovative solutions, is highly advantageous for law firms doing business in Thailand.
So far, the increasing trend of mergers and acquisitions in Thailand’s market has shown us that there are no signs of this sector slowing down anytime soon. The Thailand Securities and Exchange Commission (SEC) is witnessing an uptick of requests for listings on the Thailand Stock Exchange, a sign that economic growth is expected to continue. There is a growing interest in Thai equities from international investors as well, which is a good sign for foreign investments.
Thailand has become a top investment destination in the AEC (ASEAN Economic Community), given its tax incentives and various liberalisation policies. It is well-known to foreigners as a preferred tourist destination and is the largest economy in AEC by GDP. The country is home to several leading law firms that already have a significant international presence, making it more straightforward for the international firms seeking to do business in Thailand to represent these companies.
Notable Law Firms in Thailand
DLA Piper plays a leading role in advising multi-jurisdictional clients on significant investments in Thailand and across Southeast Asia. DLA Piper advises a number of the leading Thai companies, as well as international clients on their business and legal interests in the country. The firm is particularly recognised in telecommunications, technology, media, real estate, infrastructure, private equity, insolvency, government affairs, and energy and natural resources. Thailand partner-in-charge, Komson Jiraksa, has an excellent reputation across a wide range of private and public projects, mergers and acquisitions, privatizations, and joint ventures.
Baker McKenzie has one of the most extensive teams in Thailand, large enough to handle cross-border transactions and grow revenue in line with the firm’s bullish forecasts for the local and Southeast Asian economies. Given the firm’s size and experience, clients are able to combine services from various industry teams. Thailand managing partner, Montri Tuntisranand, is a veteran of over 40 M&A transactions.
In addition to its huge network of offices, international law firms such as CMS Cameron McKenna Nabarro Olswang and Herbert Smith Freehills are gaining a foothold in Thailand. CMS has been accepted into the Lawyers Council of Thailand, which supervises foreign law firms in Thailand. It was previously partnered with the Thai law firm Bharata Byuha. CMS aims to expand its reach across Indochina. Its rare advantages come from CMS’s position in a strong legal market. The same applies to Herbert Smith Freehills. It has forged a partnership with another Thai firm, Prayoon & Co., but also benefits from a larger firm that is focused on the Asia Pacific region.
Among domestic firms, Baker & McKenzie becomes Baker McKenzie Bolan & Jahn after merger in May 2018 with Bangkok-based partner Michael Bolan. He was the founding head of Baker McKenzie’s corporate and commercial practice in Thailand. He is now managing partner at the Bangkok office. Legal advisor to State Enterprises Commissioner at State Enterprise Policy Office, Ministry of Finance, Poom Paengprasert, also joined Baker & McKenzie as partner in May 2018. Baker & McKenzie’s expertise includes antitrust, data protection, finance, merger control, real estate, tax, and technology.
Services Provided by Thai Law Firms
Law firms in Thailand offer a wide range of services to both foreign and domestic clients. Generally speaking, legal representation in the Kingdom is available in the areas of corporate/commercial law, business law (including M&A), litigation, arbitration, tax law, intellectual property, employment/labor, administrative law and real estate / construction. Big 4 Thai law firms, in particular, are able to provide all of these services with the assistance of in house affiliated professionals such as accountants and tax advisors.
A large construction company may require the law firms to register subsidiaries, open bank accounts, form joint ventures with other companies, go through due diligence, draft and negotiate contracts, or attend real estate closing, all of which involve providing legal advice on commercial matters.
On the litigation side, the litigation team represents both plaintiffs and defendants, in both civil and criminal matters. The team is usually made up of trial level lawyers/associates, able to understand the nuances of the Thai civil law and Thai criminal law.
The arbitration team helps both domestic and foreign clients in all kinds of arbitration cases. Because the law applies differently to different kinds of arbitration cases, the arbitrator team will first analyze the type of arbitration case and the expected outcome for the parties than advise on the arbitration methodology that the specific client can best outcome. The court ligation team is then to support the civil litigation action to obtain money from the parties such as freezing the defendant’s bank account.
Selecting a Law Firm in Thailand
When choosing a law firm in Thailand, there are several factors that one should take into consideration to ensure the most qualified professionals are selected for the job. One of the most important factors is whether or not the firm has experience in advising on the desired legal services. Certain firms may specialize in one or two areas of the law but lack experience in others, meaning that it would be necessary to hire a number of different firms for a single transaction.
It is also always beneficial to choose law firms that are well known in their industry and highly praised by their clients. A number of different resources can assist clients in reviewing and vetting law firms, including international publications such as International Financial Law Review, Legal500, and Chambers & Partners. Such listings provide insight into the track record and reputation of firms and their attorneys, highlighting recognition by their peers and clients in terms of their performance and standing.
Furthermore , given the significant role foreign investment plays in the Thai economy, it is important to choose a firm that has experience advising foreign clients who have invested or seek to invest in Thailand. As such, the language ability of its lawyers, particularly with respect to English, can be a determining factor as to the relationship between a client and its chosen law firm. A number of foreign law firms have a presence in Bangkok and a number of local firms boast English speaking lawyers and staff.
Finally, a good law firm should have knowledge and understanding of the other jurisdictions from which its foreign clients conduct business. A significant number of international firms based in Bangkok have a presence in other countries throughout Asia and around the world. In order to advise its clients most effectively, it is important that the lawyers are able to understand and assess what impact the interplay of Thai and foreign law will have in the success or failure of a deal.
Opportunities and Challenges in Thailand’s Legal Market
The legal landscape in Thailand is complex, with law firms operating in an environment marked by both challenges and opportunities. The recent waves of regulatory changes have demanded that law firms remain constantly abreast of the latest updates in order to provide their clients with accurate and reliable legal counsel. Whilst this may be a challenge for some firms, others have seized the opportunity by incorporating experts with niche knowledge on these legislative reforms.
The influx of foreign businesses, particularly small and medium enterprises (SMEs), has also meant that the competition for legal services is higher than ever. The opening up of the country’s borders has resulted in an increasing demand for legal advice, not only in the well-established fields of corporate and commercial law, but also in new areas such as IP protection and e-commerce regulations.
Moreover, the growing interest in Thailand’s leasing industry has presented a significant opportunity for law firms. The government has recently introduced new rules and regulations for the leasing of agricultural land, as well as creating incentives for foreign investments in the industry. Praised for its potential to stimulate rural development, the leasing market has attracted the attention of local entrepreneurs as well as foreign investors who are keen on capitalising on the untapped market. Law firms in Thailand are therefore in a position to network with local farmers and plantation owners who are seeking to lease out their land.
Emerging Trends in Thailand’s Legal Market
With the Asian economic surge still gaining momentum, Thailand will, no doubt, continue its emergence as a regional business hub. As this trend progresses, it is likely that the Thai legal market will see a greater alignment to international standards in terms of service provision, fee structures and international practices. Where once traditional lawyering was based on face-to-face scenarios with little impact from technology, clients now expect their law firms to be well-versed in all aspects of communication technology; indeed many prospective clients will judge a law firm by its technological facility.
The increasing client expectations for more responsive customer service and wider human resources have already forced the more responsive law firms to become "one-stop shops" providing a full range of services. (These firms tend to be multinational and are virtually interchangeable with each other.) Those who are not making plans to "cross-sell" their own firm’s services to existing clients run the risk of alienating them to the proverbial "full-service" law firm. Law firms in Thailand have been gradually merging to form smaller, nimbler "one-stop shops;" as a sign of things to come, Hunton & Williams has recently announced the launch of an office in Bangkok that will be part of a new regional practice group for the Asia Pacific that will also include Hong Kong and Beijing, effective 1 September 2017.
Indeed, in an effort to retain clients, the Thai legal profession may see increased competition from the rise of an alternative law firm model. The recent arrival of NewLaw firms in Asia represents another potential source of competition. Roedl & Partner’s extension of its established German business model to Thailand, with a focus on M&A, tax, commercial and compliance practices, could be seen by some clients as an opportunity to reduce the cost of dealing with a multinational law firm . NewLaw firms claim cost effectiveness as one of their selling points; a one-firm shop with multiple practice areas may prove more attractive to clients looking to deal with only one firm to save costs.
Another factor affecting Thailand’s legal market is the increasing presence of local Thailand-based experienced lawyers. Foreign law firms need to realize that the local market is starting to smart from their indifference to their Thai menu of available services and fee structures. With an increasing number of senior Thai partners moving to take over either foreign or local firms or just opening firms of their own, the market continues to be served by those who are "ready, willing, and able" to accept clients. These firms, which have greater flexibility in their service offerings and fee structures than their multi-national counterparts, are quickly learning how to offer international-style services and are becoming an increasing threat to their competition.
Finally, following the evidence of recent steps towards transparency and probity in Thailand, the government is now focused on curbing corruption and other unlawful practices; several recent high-profile corruption cases have brought this issue to the public consciousness. A crackdown on corrupt practices will ultimately be positive for all businesses operating in Thailand, and for the Thai business sector as it makes a serious attempt to align itself with the highest international commercial standards. As competition increases between firms in an expanding market, the pressure is likely to keep fees lower than their equivalent markets, which will be good for foreign companies operating in Thailand, as they will have access to the same quality services for a lower price than their peers in neighboring countries. However, as clients become more aware of the availability of international-style service offerings within Thailand, competition may mitigate any advantages available to foreign firms.